Senate approves bill making SSS membership mandatory for OFWs

MANILA—The Senate has approved a bill that making membership in Social Security Systems (SSS) compulsory for overseas Filipino workers (OFWs).

The Senate on October 8 approved on third and final reading Senate Bill No. 1753, or the proposed “Social Security Act of 2018” which effectively repeals the 21-year old Social Security Law, or Republic Act 1161, as amended by Republic Act 8282 and expands the power of the SSS to ensure the long-term viability of the said system.

“The bill is an enhancement of the previous laws; it ensures hope that the people would not be a burden to the country, that they are partners of the government not by way of exaction of taxes but by their contribution so that their welfare is assured,” said Sen. Richard Gordon, author and sponsor of the bill.

He said the passage of the bill would expand, protect and increase the SSS fund so that when the time comes, there would be available pension for the people.

Among the new powers and key reforms under SBN 1753, Gordon said, is the compulsory coverage of both land-based and sea-based OFWs to the SSS, “provided that they are not over 60 years of age.”

He said that under the bill, the Department of Foreign Affairs and the Department of Labor and Employment would be the primary agencies that “would negotiate for the OFWs, especially those working in Middle East countries while “enhancing the functions of the Philippine embassies therein to enable them to collect the SSS contributions.”

Gordon said that although at present, there are only 500,000 OFW workers who are covered by the SSS, the bill may help expand that number to two-and-a-half million members.

“Even the Filipinos who became naturalized Americans and retired in the United States may be invited to invest in the provident fund,” he said.

He said that the bill would also give the SSS Commission the power to determine the salary credit and monthly contributions of members, which would now allow the commission to increase contributions “depending on the actuarial survey.”

“The bill envisions a benefits-based system–what you invest is what you get; no investment, no benefit — through which the SSS contributions could be raised without seeking the approval of the President or the endorsement of Congress because the discretion to increase contributions could be left to the better judgment of the SSS board of directors provided it would generate more suitable pensions,” Gordon said.

He also explained that the expanded powers are needed since it would allow the SSS management to increase the salary credit and contribution of employees “considering that at present it is only limited to P16,000 which yields very little benefit.”

Under the new reforms, Gordon said, the SSS would also be empowered to invest its Reserve Funds to “grow the wealth of SSS and ultimately yield higher income.” However, he said that these investments must satisfy requirements of liquidity, safety/security and yield “to ensure the actuarial solvency of the funds of the SSS.”

“The bill does not promise an abundance of wealth but to secure people in case they would encounter unwanted situations in their lives through a lifeline that they themselves created through their contribution,” he said.